Archive for the 'Stock Matrix' Category

Stock Matrix – Picking stocks with asset value in such times

October 10, 2008

Friends,

After I posted last under these columns today, the trading commenced in US markets and DOW lost 700 points quickly. Would you believe it recovered all losses in the mean time and traversed to green territory for a while and is at par at the moment.

How is one to enter or exit the market in such a scenario. My humble suggestion is that one should be picking stocks with asset value in such times if one has cash. He should not bother about the values still going down or up. If one does not have cash and does not require cash by selling his stock, he should nurse his portfolio by judging relative values of his held stocks and re-shuffle by picking stocks of higher value and disposing stocks of lower value. It should be slow and gradual exercise and not in a rush. By value I simply mean the stock with higher book value and a track record of profit making for last three years. The PE ratio is not of all that importance. If you are following the advices here you would not have gone into acquiring any non-substantial stock in any case.

HariOm,
Krsna Khandelwal

BIRDINFO Stock Rx – A prescription for stock market

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Stock Matrix – ACC and SAIL

June 4, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

ACC will add 7 M/T capacity over next three years. This will generate additional revenue of Rs 3500 crs. This way total revenue may expected to be between Rs 14 K crs to Rs 15 K crs in FY11. Even if it maintains net profit at about 10% of sales against 19% of sales at present, it will be able to post EPS of Rs 80/- per share. So, why have sleepless nights if ACC is going down. You may pick more of it. Though not a possibility yet if ACC becomes a take over target the acquirer will have to pay not less than Rs 2000/- per share.

ACC is cash rich too and would be looking for the expansion in capacity by acquisition of other companies/plants as well as expand through green field projects. Present locations are seeing expansion wherever feasible. As per the replacement theory its capacity of 22.4 M/T may well be valued at between Rs 20 K crs and Rs 25 K crs . This gives it an approx. value of Rs 1200/- per share .

Similar is the case with ‘SAIL’ and therefore I see some method in the madness in the present day trading in these two scrips.

According to Census 2001 , India has 35 cities with over a million population. It is estimated that these cities would require $29 bn to upgrade the transport infrastructure.

The auto sector has posted decent sales growth in the month of May 08. All the segment in auto sector have performed better.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Stock Matrix – Tata Motors and L&T

May 31, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

TATAMOTORS has decided to raise Rs 7200 crs for funding the JLR acquisition. It will be diluting the present equity and will be offered as rights in three types of instruments. It is step in right direction for it will safeguard the future of Tata Motors on one hand and since the JLR business will be a separate business owned by Tata Motors , the fruits will be all for TMs and without the liability beyond the initial contribution that too from the freshly raised equity. Needless to say that the TM will have tax saving on the interest out go till the conversion of debentures in to equity.

L&T has posted good results for the last quarter ended March 08. The top line growth assures that the infrastructure spending is growing whatever the impressions be.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Stock Matrix – SAIL’s share may trade well beyond Rs 300 per share in less than 2 years

May 22, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

The SAIL’s capacity is going to go up to 26.2 M/T from the present capacity of 14.6 M/T by 2010 at an outlay of Rs 54000 crs. By a simple calculation we arrive at a figure of around Rs 4500 crs towards cost of setting up one million capacity. Applying a lower figure for the present capacity at Rs 3000 crs per million tonne towards costs we arrive at a valuation of Rs 45000 crs invested out of self generated funds by SAIL , we may safely value the company at Rs 65000 crs which works out to Rs160 per share. The present price of SAIL’s equity share is close to this figure but considering the RONW at far higher rate than ordinarily is the case for most companies we should be comfortable to give at least 100% premium to the present enterprise value of Rs 65000 crs as earlier arrived at. By this simple and reasonable calculation it may be said that given a more congenial environment, the SAIL’s share may trade well beyond Rs 300 per share. I have not given any value to the hidden assets of the company and for its investment in subsidiary companies while working out the enterprise value.

The crude steel production for 07-08 has gone up to 34.71 M/T rising by 10% per annum since 02-03. Similarly, the finished steel production touched 55.27 M/T mark in 07-08 against 37.17 M/T in 02-03. These are very encouraging figures. India’s steel demand is going to remain stronger in the near future without doubt.

There have been 193 MOUs signed with various states covering a planned capacity of 243 M/T for an out lay of Rs 5.14 lac crores.

May I therefore say it is high time to invest in SAIL and not listen to the noise making you jittery about investing.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Winning ways in chess and stock market are similar

February 8, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

Vishwanathan Anand is already well-known in our country and presently holds the world championship title in chess. He told to ET correspondents about his winning ways in chess which may be applied to other fields of activity also for results. A stock market player would find it all the more interesting to learn and use and these are:

A) Know your goals : Without the goal in sight it is easy to get distracted and miss out on success.

B) Strive for objectivity : It is easy to get emotional and it is necessary to do analytical work continuously and be objective about its application and not be carried away by the leanings of the self.

C) Don’t worry about things you can’t control : This is some thing that must be kept in mind and the control should be exercised on the things well within your power.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market